Resisting the Restoration: response to Premesh Lalu

This paper questions Wassenaar's analysis of the ‘financial crisis in South Africa’. It examines the important differences which Wassenaar ignores between 1972–1974 when government revenue rose substantially relative to government expenditure and the period after that when the fiscal deficit rose so substantially. The review considers that Wassenaar has failed to provide any convincing explanation of why government has grown in South Africa. An alternative explanation is offered that draws on the emerging economic analysis of political action. The review then goes on to examine the recent South African Insurance Commission report to see how well opinion in Dr. Wassenaar's own industry accords with the principles of free enterprise. It finds that even in his own industry attachment to competitive principles is highly ambiguous.